India's top startups Flipkart, InMobi say domestic public markets is not yet ready for them

India's most valuable tech and Internet companies like online retailer Flipkart and mobile ad network InMobi would like to list in domestic public markets, but do not think the markets are deep enough for themET Bureau | January 16, 2016, 19:38 IST

India's most valuable tech and Internet companies like online retailer Flipkart and mobile ad network InMobi would like to list in domestic public markets, but do not think the markets are deep enough for them.

These companies cited issues ranging policy and amount of capital available here as issues in a panel moderated by Minister of State for Finance Jayant Sinha at the Startup India summit on Saturday.

"I think right now as we stand the Indian market needs to be upgraded quite a bit to raise large amounts of funds. Apart from that we would love to raise funds in India from the public market," said Sachin Bansal, executive chairman and co-founder of India's most valued internet company Flipkart. The Bengaluru based e-tailer has raised over $3 billion till now from foreign investors and is valued at $15 billion.

Others like e-tailer Shopclues Radhika Ghai Aggarwal and budget hotel chain Oyo Rooms Ritesh Agarwal also agreed, saying that there is an emotional connect with the Indian market where retail investors would better understand them since they use these services.

"I would like them (customers and hotel owners) to own shares of Oyo which will be easiest if we are listed in India," said Agarwal, whose startup is valued over $400 million.

But of the five companies on the panel - Oyo Rooms, Flipkart, Shopclues, Inmobi, July Systems - four except Oyo are already registered outside India.

"(It is) close to impossible to list in India as things are right now," said Naveen Tewari, CEO of InMobi. "I don't think Indian markets are ready to absorb number of Internet companies that might go public in India the next 5 years."

Sinha, who was earlier a venture capital investor at Omidyar Network, said that if some Indian unicorns decide to list in India it would "be a booster shot for our capital market" but also underlined the issues.

The minister said that "for our markets to adsorb a $20-25 billion market capitalisation of (Flipkart) is the real question," adding that most valued listed Indian internet company is Info Edge with a market captialisation of $1.41 billion. Bansal agreed with him.